FF13 wasn't built with western gamers in mind. Western RPGs are big, open worlds with real freedom. Final Fantasy and pretty much the whole JRPG genre has what I call "false freedom" which is a restricted world that makes you feel like you can do what you want, FF13 just ended the illusion. The game was designed for Japanese gamer's tastes by focusing on characters, story, and turn based battles. Oh and let's not forget cinematic flare, something western RPGs tend to sacrifice for expanding world detail and freedom. If it had been designed with western gamers in mind it would have featured real time combat, an optional first person mode, and a character designer. The 360 and the western market were an after thought. In fact I'd be willing to bet that the game was basically finished and was delayed for the port because Microsoft has a rule that all multiplatform games must be released on the same day or before other versions unless they contain extra features. FF13 was designed for Japan then localized and ported. That is all. It would have been the same game had it been PS3 exclusive and only released in Japan.

FF8 was shit, FFXII was shit so I don't understand what the author is talking about.

FFXIII was westernized ???? It is so much japanese that makes me wanna puke, really...

2 out of how many?

No. Its a ridiculous assumption.

The game was already well in development when they decided to PORT it to the Xbox 360.

Its all Sqaure-enix's fault and sad allocation of resources and design decisions.

You could change the question for: Did Xbox360 indirectly damage japanese developers?

Some points used for speculation

1.Much of the content for Final Fantasy XIII was cut.

2.They used the cut content to develop Final Fantasy XIII-2 and so on.

3.Square never released a game with more than 4 discs.

4.What happened with  Nautilus mini games? Who played the game knows what i am talking about.

5.This was published before the game release:

http://www.destructoid.com/final-fantasy-xiii-deleted-a-full-game-s-worth-of-stuff-160357.phtml

EDIT: 6. how to make a HD game with backtracking (returning to initial locations) spanning multiple DVD disks?

Final Fantasy is turning from an RPG into an Adventure game with RPG elements, similar to Bioware and Bethisalawhatever games.

I think the developers at Square have lost their touch in creating good RPGs. At least there are a lot of companies that arestill developing great RPGs without trying to pollute the genre with action/adventure pseudo-RPGs.

Interesting, I never noticed the connection of FF going multiplatform with FF's demise.

It didn't ruin the franchise directly, that was bad management. Did it indirectly ruined Final Fantasy XIII? Yes and no. Final Fantasy 13 ended up with its quality regardless of outside forces, that's because Toriyama isn't a good writer/director. Final Fantasy 13 should have released a good year earlier, and that's indirectly the 360 fault. Why is it the 360's fault? Cause Square lost all their good developers. They were making the game on the PS3, 360 port gets decided, they STOP developing on the PS3, make the game on PC. They finished the game on PC, then port the game back to PS3, then work on the 360 port got into full production, all while raiding Final Fantasy VS 13 dev team. The long dev time to finish a mediocre Final Fantasy most likely burned a lot of fans.

I think it did damage it by causing additional 1 year of delay.
And generally Microsoft and their timed exclusivity deals have damaged jRPG genre as a whole by splitting userbase and reducing hype/advertising for both versions.